New 1099-R treatment?

[Snaggletooth]

For a few years now, my client has been using his IRA RMD to donate to his church. He has been getting a 1099-R for the amount, with a disclosure checkmark that the "Taxable Amount Not Determined." I am told the reason the taxable amount is not zero is because the IRS will not certify that the recipient is a legitimate not-for-profit. So the box for the taxable amount is populated as well as the gross amount, with the disclosure that the "Taxable Amount Not Determined."

This year, no 1099-R. Only a statement from the custodian confirming the proceeds were diverted to the church. The amount is shown, plus the recipient.

Has the practice changed?

[kathyc2]

I've never seen a 1099R for IRA that doesn't have the taxable amount not determined checked. Doesn't have anything to do with QCD but rather the holder of IRA doesn't know if any contributions were non-deductible.

[FEDUKE404]

I question NO Form 1099-R should have been issued.

I have several clients (including myself!) who have initiated qualifying QCDs during 2024.
The numbers shown on the tax document are not impacted by any QCD issues. You must make the proper entries in your tax software to reduce the Form 1099-R amount to compensate for the reduction in the *taxable* amount and to generate the required "QCD" letters on Form 1040 beside line 4b.

OTOH I have never had a client who gave ALL of his calendar year distributions to a charity via QCD. Perhaps the IRS reporting rules differ in that specific scenario?? (And of course, nothing prohibits anyone from giving MORE than an RMD amount to charity via QCDs!).

[Rapid Robert]

I agree, there should still be a 1099-R.

"statement from the custodian confirming the proceeds were diverted to the church." That does not replace the required acknowledgement from the charity itself which must be received before the earlier of the filing date or the due date of the return.

[RWG1950]

Snaggletooth
The IRS is not in the business of certifying the charity's legitimacy (until an audit occurs). It is up to the taxpayer (as always) to "certify" the legitimacy of the charity. The taxable box will be populated. It is up to the preparer (when entering the 1099-R data) to enter the amount of QCD (either part or all) of the distribution so that differing amounts appear on lines 4-a & 4-b of the 1040.
A 1099-R was likely issued and simply misplaced by the recipient. Have your customer request a duplicate 1099-R.
It is important to note that the donor of a QCD is required to get a contemporaneous receipt from the charity that has the eleven "magic" words on it.